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With a comprehensive dataset of 58 countries over the period 1987-2010, this paper investigates the effect of IPO on bank performance, measured by efficiency scores estimated using the stochastic frontier approach. Post-issue underperformance is found over the IPO years. This paper further examines the long-run performance of IPO banks beyond the IPO years with regression analysis and finds that IPO banks’ cost efficiency improves while profit efficiency deteriorates after IPO. This study also documents the declining trend of cost efficiency after IPO, although the trend of post-IPO profit efficiency is country-dependent – an upward trend for U.S. banks and a downward trend for non-U.S. banks. It is also observed that large banks are associated with higher cost efficiency and lower profit efficiency, a higher capital ratio leads to low efficiency and banks relying more on traditional interest-generating businesses are more efficient.